Suchergebnisse

A multi-stage model on the course of war is presented: Individual battles are modeled as private value all-pay auctions with asymmetric combatants of two opposing teams. These auctions are placed within a multi-stage framework with a tug-of-war structure. Such framing provides a microfounded rationale for the use of the popular logit Tullock contest success function in models of militarized conflicts, yields new theoretical justification for existing empirical findings with respect to war, and provides new hypotheses regarding strategic battlefield behavior.

AbstractWe study contracting for advice by an agent about how much a principal should invest in a project. Providing the agent with incentives to perform research endogenously generates incentives for her to misreport the results. For high‐cost (low‐cost) projects, she wishes to overstate (understate) the magnitude—though not the direction—of her research findings. For high‐cost projects, the principal mitigates the concomitant agency rents by committing to ignore extreme (Young‐Turk) recommendations, whereas for low‐cost projects, he ignores mild (Yes‐Man) ones. These results are shown to be robust to several natural extensions of the model.